Q&A Mutual Funds

I am 59, retired and have been investing in mutual funds since 2007. I invested Rs60,000 in Reliance Diversified Power, Rs30,000 in Reliance Growth and SBI Magnum Multiplier Plus in 2007. I also invested Rs30,000 in IDFC Premier Equity and BSL Special Situations funds in January 2008. I have been investing Rs1,000 each in SIPs for over a year in Sundaram SMILE, ICICI Pru Discovery, HDFC Equity, and Reliance Regular Savings Equity. I had a SIP in DSPBR Top 100 Equity, which I stopped. Should I redeem the funds in which I invested lump-sum amounts? How is my portfolio?

Pramod Bajpai

Over the past five years, you have invested in 10 mutual fund schemes. The portfolio indicates 95% equity allocation, with a large-cap blend of growth and value orientation.

You need to reduce your holdings to 4-5 funds, in which you should regularly invest depending on your risk tolerance and also monitor their performance regularly.

At present, you have investments in five multi-cap, three midand small-cap funds and a speciality fund in Reliance Diversified Power sector fund. All these funds have higher investments risk.

Depending on the tax liability on investments, especially the running SIPs in some funds, you can redeem investments in funds made in 2007-08 to start fresh investments.

Building a corpus

Im 53. I have monthly SIPs of Rs2,500 each in DSPBR Equity and BSL Frontline, Rs2,000 each in DSPBR Balanced and Reliance Regular Savings, Rs1,000 in DSPBR Small cap and Rs3,000 in Reliance Pharma since June 2010. Is my investment good for another two years? I am investing to build a corpus, which I may need after five years.

Uday Sohag

Your portfolio has 89% equity exposure with a large-cap growth orientation. The top three sectors in your portfolio are healthcare, finance and technology and have 49% allocation.

The portfolio has overlaps with two equity-oriented hybrid funds in it. You can retain one of them. Continue investing in these funds, which are highly rated.